Summary
The Revenue disputed deduction under Section 43B for advance central excise duty deposited in the Personal Ledger Account before adjustment against clearances. Examining the statutory deposit scheme and the assessee’s lack of control over deposited funds, the Court held that the deposit constituted actual payment and upheld the deductions.
Issues
- Whether advance excise duty deposited in the Personal Ledger Account qualifies as actual payment for Section 43B deduction.
- Whether past acceptance of the accounting practice alone precluded the Revenue’s challenge.
Held
- The Revenue was not barred from raising a substantial question of law, a public-interest issue or a recurring issue merely because it had accepted the practice in other years or had not appealed similar High Court decisions. The merits required determination. (¶ 8)
- The PLA deposit was statutorily required and credited the money to the Revenue. Withdrawal required an application and the Commissioner’s recorded reasons; the assessee had no dominion over the amount. Later adjustment against removals did not make the deposit something less than payment. (¶ 9–10)
- Section 43B prevents deductions based only on book entries without payment to the State. Allowing deduction upon actual advance deposit furthered that purpose, even though adjustment occurred on subsequent clearances. The consistent practice, final favourable High Court decisions and absence of contrary authority reinforced the conclusion in these cases. (¶ 11–12)
Result
Revenue appeals dismissed; Delhi and Calcutta High Court orders affirmed. Advance excise duty deposited in the PLA held deductible as actual payment under Section 43B.